Walgreens Net-Zero Store Set to Open
At presstime, construction was wrapping up on Walgreens’ new location in Evanston, Ill. The store is the drug store chain’s — and the nation’s — first net-zero energy retail store. In addition to seeking LEED Platinum certification, Green Chill Platinum certification and Energy Star Certification, it will be the showcase project in the U.S. Department of Energy’s Better Building Challenge.
Befitting its net-zero status, the new Walgreens is employing a number of alternative energy sources and energy-efficient technologies. The use of geothermal energy (eight 550-foot deep boreholes), all-LED lighting, natural ventilation, daylight harvesting, automatic dimmers, control strategies and an ultra-high efficiency mechanical system will reduce the amount of energy used by 56% over a typical facility.
The solar panel system — consisting of about 850 roof-top panels — will generate about 90% of the store’s energy. The remainder will come from two wind turbines that are located on site. Through the use of the solar panels and the turbines, the store will produce an estimated 220,000 kwh of electricity — more than the 200,000 kwh that energy modeling shows the building will use.
In other key features, Walgreens is using an all-natural CO refrigeration system for heating, cooling and refrigeration equipment.
Walgreens hopes to use this store as a testing ground for the latest green technologies, products and materials, with a goal of finding ways to incorporate some of the concepts into its national design standards.
(Walgreens will present an in-depth look at its net-zero energy store on March 10, 2014, at Chain Store Age’s SPECS conference, at the Gaylord Texan, Grapevine,Texas. For details, go to specsshow.com.)
Redeveloping Retail: America’s Top Redevelopers
In its ninth year, the annual Top Redevelopers survey continues to demonstrate the value of redeveloping and repositioning shopping centers. As always, the goals include refreshing, remodeling, tweaking, and sometimes demolishing and rebuilding with an eye to providing tenants with space that supports their goals.
Just like the 2011-2012 survey, this year’s survey analyzed redevelopment work from mid-year to mid-year — in this case, from July 1, 2012, through June 30, 2013 — to ensure the most current results possible. Survey participants submitted total square footage redeveloped during that period, the number of projects undertaken and, when available, the financial investment for each project. As always, the Chain Store Age judging committee attempted to make the selection process as objective as possible — no easy task. Not enough information is available to develop a foolproof ranking system. Only a few developers report redevelopment financial investments and many account for redeveloped square footage in proprietary ways.
This year, we chose 12 developers based on the number of properties redeveloped, total square feet affected and significant projects. We have summarized the results for each of the 12 developers below in alphabetical order because it is literally impossible to rank one above the other.
Brixmor Property Group
New York City
From July 1, 2012, through June 30, 2013, Brixmor Property Group spent $98 million redeveloping 29 properties in 14 states spanning 7,767,529 sq. ft. The company calls the $13 million redevelopment of College Plaza in Selden, N.Y., its most significant. The 175,400-sq.-ft. shopping center was in a strong location, but was hampered by a vacant anchor and an oversized Bob’s Stores aiming to downsize. The redevelopment relocated Bob’s Stores to a 31,000-sq.-ft. space and remerchandised the former space with a 68,000-sq.-ft. ShopRite.
Cafaro redeveloped 344,306 sq. ft. at five shopping centers in four states over the survey period. The largest was the Ohio Valley Mall in St. Clairsville, Ohio. Defending against competitive challenges from new developments, Cafaro installed new flooring, ceilings, skylights, HVAC, lighting, security, food court, signage and entrances. Outside, Cafaro added fresh lighting and landscaping. The redevelopment encouraged Macy’s to redo its store and brought Ohio’s first Boscov’s to the mall. Sales are up, and some tenants report same-store sales increases approaching 100%.
CBL & Associates Properties
CBL redeveloped 5,403,625 sq. ft. of space this year in eight centers. The company acquired Northgate Mall and The Shops at Northgate in late 2011 with plans to revitalize the complex. The mall renovation improved the main entrance and repaved portions of the parking lot. Interior work installed soft seating, new flooring and ceilings. An Old Navy store is under construction next to the southwest mall entrance. Across the parking field from the mall, The Shops also received a makeover.
EDENS completed five redevelopment projects this year, spending nearly $53 million. Redevelopment projects included the 50-year old Sunshine Square in the heart of east Boynton Beach, Fla. The $11.7 million project expanded the Publix grocery store anchor and updated the hardscapes and landscaping. Sustainable building practices included the use of low-VOC material, adhesives and finishes. The work also added new high-efficiency irrigation systems and Energy Star-rated HVAC units.
Forest City Enterprises
Forest City carried out one redevelopment this year, but it was a big one — the 933,979-sq.-ft. Charleston Town Center, in Charleston, W.Va. The $7 million renovation replaced the flooring on all three levels with ceramic tile and carpeting and added a new fountain in the center court. Additional improvements included a technology bar with Wi-Fi, new signage and lighting, and a more inviting color palette. A remerchandising strategy brought in Sephora, Francesca’s, White House | Black Market and Coach.
Pennsylvania Real Estate Investment Trust
PREIT redeveloped 379,394 sq. ft. in 11 shopping centers over the survey period. The most significant project took place at the Capital City Mall with the 5,000-sq.-ft. expansion to accommodate the first DSW Shoe Warehouse in Camp Hill, in the Harrisburg, Pa., area. The 17,500-sq.-ft. store occupies a once hard-to-fill corridor and has helped cement Capital City Mall as the area’s top shopping and dining destination.
Phillips Edison & Co.
Phillips Edison & Co. carried out 32 redevelopment projects encompassing 964,809 sq. ft. over the survey period. One of the most significant projects was Sendik’s Towne Centre, a 189,116-sq.-ft. mixed-use development in Brookfield, Wis., acquired in fall 2012. Phillips Edison spent $1.5 million to reconfigure the parking lot and correct confusing traffic patterns, add 78 parking stalls and create a more pedestrian-friendly atmosphere. Additional improvements include enhanced landscaping and directional signage.
Regency Centers reworked 1,704,943 sq. ft. in 11 centers, spending more than $48 million during the survey period. A key redevelopment was Powers Ferry Square, an aging center located in the Buckhead area of Atlanta. Originally built in 1951, the center had deteriorated in appearance, creating the possibility that tenants would leave. The renovation rewarded existing tenants with a new facade, arched redbrick colonnades, awnings and new tenant signage. Those features attracted new tenants including Petco, Panera Bread and Uncle Maddio’s Pizza Joint.
New York City
From July 2012 through June of this year, Rouse redid three properties totaling 1,863,674 sq. ft. The company calls the multimillion-dollar renovation of Pierre Bossier Mall in Bossier City, La., the most significant. The work entailed a major interior facelift, enhanced entrances and signage. Specifics include new porcelain tile flooring, soft seating, Wi-Fi in all the common areas and a children’s play area. Since the completion of the renovation in 2013, Pierre Bossier has experienced a 9% increase in occupancy.
Simon Property Group
Simon Property Group redeveloped 31,515,300 sq. ft. at 32 properties. The largest projects were at King of Prussia Mall — 2,470,000 sq. ft. — in King of Prussia, Pa., and Sawgrass Mills — 2,295,000 sq. ft. — in Sunrise, Fla. King of Prussia underwent a multi-level expansion connecting the five-anchor Plaza and the two-anchor Court. Sawgrass Mills received a 40,000-sq.-ft. expansion of The Colonnade Outlets section. Prada, Armani, Diane Von Furstenberg and Robert Graham have moved into the new wing.
Westfield carried out 11 redevelopment projects spanning 2,258,000 sq. ft. over the 12-month survey period. Notable among those 11 projects was the renovation of Westfield UTC in San Diego, a $180 million resort-inspired transformation that added new luxury boutiques, a number of San Diego debuts, a new dining terrace and new entertainment choices, such as ArcLight Cinemas, a 14-screen, 1,800-seat luxury theater. The new UTC features sleek modern architecture and resort-style amenities, including children’s play places, family lounges and interactive community gathering spaces.
Chestnut Hill, Mass.
WS Development completed eight projects encompassing 703,005 sq. ft. The most significant was The Street in Chestnut Hill, Mass. Originally constructed in 1950, the property has been redeveloped into a powerful new configuration of specialty shops, restaurants and entertainment. The property’s form, feel and function are akin to that of a downtown main street. Comprised of more than 400,000 sq. ft., the LEED-certified center features Sports Club/LA’s first “Jewel Box” concept, National Amusements’ first Showcase SuperLux and Davio’s Cucina theater and dining complex.
Showrooming, much like many other perceived threats in retail, must be seen as an opportunity, not as a negative. Arguably, the challenges that showrooming has created for retailers are relative to price transparency and finding a place and role within the consumer’s mind that will be superior to the online retailer (remembering that many online retailers can offer broader assortments, 24/7 convenience and shopping accessibility).
1. Embrace the Reality
The first point is “Embrace the Reality.” The hours and energy that corporate resources spend to argue “denial” are understandable, yet that is the most dangerous reaction to showrooming. The thoughts around “creating imaginary force fields” that defeat the consumer’s access to online information, such as bait-and-switch strategies, and even activities to create confusion around model numbers and specifications are all shortsighted. Not only will they not effectively prevent showrooming, but they will erode the consumer’s confidence and trust in the retailer who now might be seen as “the enemy.”
In “Embracing the Reality,” look toward ways to enrich and reinforce consumer relationships through showroom activity. Research has shown that consumers who have had effective and helpful showrooming activities are highly likely to buy from the retailer, and will buy more by consolidating both their online and in-store activities.
2. Implement Omnichannel Focus
The next point to consider in combatting showrooming is to think less siloed and more omnichannel. Omnichannel is a term that is gaining rapid acceptance among the retail community that has found their best consumers from a life-purchase perspective. They tend to be the customers who not only don’t simply shop one channel or the other, but who shop across a rich variety of channels at different occasions, and do so across the widest variety of categories and products.
In many cases, retailers are the biggest barrier to their own omnichannel retailing. They often jealously guard their consumer information by channel. This impacts the store environment in many ways. Rather than isolating the consumer’s access to online or competitive information, they can make this a focal point of the experience, accomplished by creating interactive digital elements within product displays. Through training, retailers can also encourage their sales associates to expose the customer to the full breadth of inventory, whether it is actually housed in-store or remotely.
One of the big changes in looking at the showrooming concept is focused on ordering online and picking up in-store. The store inventory can provide more near-term accessibility to products for last-minute purchase — another way to provide further trial and sampling of the product. But most importantly, it typically provides an additional purchase occasion by the consumer who has ordered online, picked up in-store, and now may be exposed to the wide variety of accessories and add-on purchases that will make their online purchase even more satisfying.
3. Integrate Mobile Technology
Increasingly, retailers are using mobile to expose consumers to new products, social network endorsements of their peers and entertainment related to available product. Yet we haven’t seen major translation of mobile activity into direct purchase activity (such as purchasing with a mobile device).
However, we found that mobile provides huge opportunities for integrating your store experience through in-store connections — like driving location-specific promotional activities based on customer proximity to store locations. They could provide everything from fitting room trial of fashion products, to in-store QR coding and/or near-field communication using the consumers’ mobile device as the access point.
Embrace the Reality, Implement an Omnichannel Focus, and Integrate Mobile Technology to help you combat the challenges of showrooming.
Kenneth Nisch is chairman of JGA, a retail design and brand strategy firm in Southfield, Mich.